When times are good, or at least relatively good, unsustainable trends
can appear sustainable. The now-aging baby boomers who had a lot of their
wealth tied up in their home and the stock market were feeling great. They
had just come off of a 20 year super-bull market in equities and up until
2007 they were seeing the value of their home increase by leaps and bounds
every year.

Sure, their kids were scraping by on credit card and student loan debt.
But there were jobs to be found and even if they couldn't scrape by they
could always count on some help, and even housing, from Mom and Pop.

However, in 2007, everything changed. The inflationary game that the likes
of Alan Greenspan, Paul Krugman and Ben Bernanke had been playing reached
its inevitable conclusion: a massively overindebted economy teaming with
unsustainable malinvestments that had to be purged.

And now, with baby boomers reaching "retirement age" and expecting to receive
public and private pensions and retire on their assets which have been invested
in the stock market and housing, all of a sudden, everything has changed.
Meanwhile, their prodigy, the most indebted, unemployed generation in history
are going to be expected to somehow pay for the bankrupt social security
system that is already in deficit.

Let's take a closer look at these two groups and the dire predicament they
will soon find themselves in.

The Baby Boomers

At one end of the spectrum, the baby boomers have been getting annihilated.
Not all, of course, but the majority. They lost trillions in the stock crash
of '08 and now, like scared lemmings, are running headlong into the next great
disaster, US Government bonds, where they will likely lose a significant portion
of what they have remaining - either through inflation, rising interest rates
or outright default of the debt.

And, just as the baby boomers lose their last bit of savings the US government
will announce that the bankrupt Social Security system will either be gone,
altogether, cut back significantly or the payments will be inflated into worthlessness.
This year, for the first time in nearly 30 years, Social Security will pay
out more benefits than it receives in payroll taxes. The same goes for 2011
and by 2015 the program is expected to regularly operate with an annual deficit.

And for the baby boomers who have state and corporate pensions, who do you
think lost the most money in the stock collapse of '08 and is also one of those
running headlong into the coming bond implosion? You got it. The pension funds.

The Iowa state pension fund's value dropped over $3 billion in the course
of 2008, putting it at a total deficit of nearly $5 billion. A report by the
University of Kansas described that state's pension fund as "bankrupt," with
a projected shortfall between assets and payout obligations of $8.3 billion
in the next 25 years.

The New York state retirement fund lost $23 billion in 2008. And the largest
fund of them all, the California Public Employee Retirement System (CALPERS)
and the California State Teacher Retirement System (CALSTRS), together lost
a total of $100 billion of their high of $260 billion in assets after the 2008
crash.

In other words, just as the baby boomers have been wiped out by the stock
collapse of '08 and the coming bond collapse they will look to fall back upon
their pensions and Social Security. Both of which will either be gone or inflated
to levels not even allowing a meagre existence.

And that is if the government itself does not confiscate pensions and retirement
savings and demand that they be put into soon-to-be-worthless government debt.
Far fetched? Spain's secretary of state for social security, Octavio Granada,
was recently quoted as saying that by the end of 2010 some 90% of all Spanish
pension savings will be "invested" in domestic government debt. Spain isn't
some 3rd world banana republic and they are already moving strongly in this
direction. With trillion dollar deficits as far as the eye can see, where else
can the US Government hope to get the money to fund all their debt?

So, that leaves two last options for baby boomers hoping to retire. The value
of their house and their "retirement" savings.

The housing market has been decimated, as is public knowledge, but many don't
realize it is still going to get worse. Much worse. A record 25.5% drop in
home sales was just reported in July and has contributed to a record level
of unsold inventories of homes for sale.

Inventories of existing homes for sale as measured by months supply broke
an all-time record in July. Normally it would take four to five months to sell
the outstanding amount of homes for sale in the US. The current amount of supply
available will take 12.5 months to sell at current levels.

This level of supply will put additional downward pressure on house prices.
Total housing inventory at the end of July increased 2.5% to 3.98 million existing
homes available for sale.

And so, just as Ma' and Pa' find themselves wiped out from the crash of '08
and the coming bond collapse they will receive notice that their pensions have
gone under and/or have been cut back dramatically. They will then look to try
to sell their home, or at least get a reverse-mortgage to get some sort of
income, but the value of their house will have dropped significantly.

As for savings, in a 2009 Retirement Confidence Survey by the Employee Benefits
Research Institute, 53% of workers in the U.S. have less than $25,000 in total
savings and investments and even most of that will likely disappear in the
bond collapse and we will see millions of destitute baby boomers.

Where will they turn, to their kids?

Boomerang Kids

Much has been written over the last decade or two about "Boomerang Kids".
The term, generally, means an adult in their 20s, 30s and sometimes 40s who
returns home to live with their parents after an unsuccessful foray in the
real world.

Often this condition is caused by the inflationary world we have been living
in for the last few decades. Stealth inflation has slowly stolen from everyone
leaving many younger people without the ability to afford even basic living
expenses much less a home for themselves. Not to mention student loans sometimes
reaching into the 6 figures, for a degree most of them will never use or need,
that they'll be paying off for much of their adult life. And the US government
has enacted legislation which never allows this debt to be repudiated even
in a bankruptcy. That is bad news for students who now have a combined $830
billion in student loan debts, growing at $3,000 per second - now the biggest
area of personal indebtedness, surpassing credit card debt.

These 20, 30 and 40-somethings are heavily indebted and looking at the worst
job market in 80 years as estimated by Shadowstats.com (a much more realistic
picture of US unemployment) with unemployment at 22% and rising.

In fact, there is a new name for all the people who have been unemployed for
years: "the '99ers". These people, who already number more than a million,
are Americans who have already used up their 99 weeks (nearly 2 years) of unemployment
benefits. You can see just how dire and desperate the situation is for millions
of Americans by checking out the forum at a site called Unemployed
Friends. It is a message board for the unemployed in America and, sadly,
countless of the messages talk of and end in suicide.

And so, what happens when the heavily indebted, unemployed, depressed and
sometimes suicidal boomerang kids find that mom & pop not only had to reverse
mortgage their home just to make basic living expenses and may soon be looking
to the working-age child to provide them with a means of subsistence?

Anarcho-Capitalist. Libertarian. Freedom fighter against mankind's two biggest
enemies, the State and the Central Banks. Jeff Berwick is the founder of The
Dollar Vigilante, CEO of TDV Media & Services and
host of the popular video podcast, Anarchast.
Jeff is a prominent speaker at many of the world's freedom, investment and
gold conferences as well as regularly in the media including CNBC, CNN and
Fox Business.

Jeff's background in the financial markets dates back to his founding of Canada's
largest financial website, Stockhouse.com, in 1994. In the late '90s the company
expanded worldwide into 8 different countries and had 250 employees and a
market capitalization of $240 million USD at the peak of the "tech bubble".
To this day more than a million investors use Stockhouse.com for investment
information every month.

Jeff was the CEO from 1994 until 2002 when he sold the company and still continued
on as a director afterwards until 2007. Afterwards, Berwick went forth to
live on and travel the world by sailboat but after one year of sailing his
boat sank in a storm off the coast of El Salvador. After being saved clinging
to his surfboard with nothing but a pair of surfing shorts left of all his
material possessions he decided to "live nowhere" and travel the world as
spontaneously as possible with one overarching goal: See and understand the
world with his own eyes, not through the lens of the media.

He went on to visit nearly 100 countries over four years and did and saw things
that no education could ever teach. He met and spoke with a plethora of amazing
people, from self-made billionaires to some of the brightest minds in finance
- as well as entrepreneurs from a broad range of backgrounds and locations
from tech companies in southern China to resource developers in Mongolia,
Thailand, Russia and Chile. He also read everything he could find on how the
world really works... politically and financially. A pursuit he continues
to this day.

He expatriated, long ago from his country of birth, Canada, and considers
himself a citizen of the world. He has lived in numerous locales since including
Los Angeles, Hong Kong, Bangkok and currently lives in Acapulco, Mexico and
is building a home in Cafayate, Argentina. In essence, everything he writes
about here for TDV he has done or is doing.

As well, during his travels, both real and virtual (through the internet),
he met some amazing people who have a similar shared vision of what is currently
going on in the world and enticed them to come aboard TDV and provide their
own brand of analysis.